Small business optimism abounds in Alberta

Alberta small business owners are the most optimistic in the country, while a string of bad economic news has brought down confidence among entrepreneurs across the rest of Canada, according to the Canadian Federation of Independent Business.

With a confidence index score of 75 in Alberta for August, small business owners more than beat the average national score of 61.7 — the lowest national reading since July 2009, according to a survey conducted by the CFIB.

The debt ceiling debate in the United States, followed by unsettled equity markets around the world, is to blame for a general drop in small business confidence in Canada, said CFIB vice president and chief economist Ted Mallet.

The index ranges between 65 and 75 when the economy is growing, said Mallet. An index number of more than 50 means more owners expect their performance to be stronger next year than are expecting their performance to be weaker.

The findings are based on 957 responses to a list of 12 standard questions collected from a stratified random sample of CFIB members, and are accurate to plus or minus 3.2 per cent, 19 times out of 20.

The relatively buoyant business mood in Alberta – which far outstrips Ontario’s confidence index of 60.1 – is in large part due to the province’s oil patch. In fact, small business confidence numbers have hovered in the mid-70 range in Alberta over the past six months, said CFIB’s Mallet.

"Any businesses that service the oil patch will be significantly affected," he says. "And those that service those that service the oil patch will also do well – restaurants, accountants, lawyers, bookkeepers and others. Energy is a need even during the worst part of the economy."

Small entrepreneurs working in natural resources, manufacturing, wholesaling and retail have been more "upbeat than average" in Alberta through the spring and summer of this year, added Mallet.

Wendy Blackwell, executive director for the Economic Development Alliance of Southeast Alberta, says she’s seen the same "renewed optimism" from her members as they’ve emerged from the last recession in 2008.

"A lot of projects are getting off the ground in the oil patch, and of course that filters out across the province," said Blackwell.

Certainly Keith Donahue, president of Querty Computers in Medicine Hat, Alta., is one of the small businesses that says it is going "full tilt." His company recently expanded from its core business servicing computers into installing video surveillance networks and servicing in-store debit machines.

"I thought maybe this summer we could get to other projects we’ve had on the backburner. We didn’t get to touch anything this year it’s been so busy," said Donahue.

He did notice a drop in his debit machine servicing business over a three- to four-month period at the height of the last recession in early 2009. Donahue said storeowners told him that so few customers were using the machines that they didn’t need servicing.

"It hasn’t totally recovered. But the other parts of our business have increased. We are quite optimistic – we’re just really busy," said Donahue.